Why isn’t government contributing to EIS? Workers union asks

KUALA LUMPUR, Aug 3 ― Malaysian Trade Unions Congress (MTUC) wants the government to contribute financially to the Employers Insurance Scheme (EIS) which seeks to protect workers who have lost their jobs.

Its secretary-general J. Solomon also said the amount of contribution from workers and employers is excessive and that the decision was made arbitrarily without genuine prior consultation from workers groups.

“The workers are already undergoing depressed wages since the ‘80s and with the high cost of living and the imposition of the 6 per cent GST is driving the workers into further difficulties,” Solomon said in a brief interview with Malay Mail Online today.

“The government has refused to contribute any sum to the EIS but on the contrary wants to have absolute powers and control over the management and the administration of the EIS,” he added.

The EIS Bill was tabled for the first reading in the Dewan Rakyat last Tuesday, after years of back-and-forth negotiations.

The scheme will allow retrenched workers to claim a portion of their insured salary for between three and six months of unemployment as well as allowances.

Contributions to the Employment Insurance Fund, which will be based on the worker’s salary, are split equally between the employee and the employer. The contributions based on fixed rates range from 20 sen for workers earning RM30 monthly to RM59.30 for employees earning RM4,000 and above a month.

The Malaysian Socialist Party, which has been involved in the EIS negotiations from the start through some of its labour activists, welcomed the Bill and hailed it as a major success for workers.

But MTUC disagreed. Solomon said while the unions have always been supportive of the EIS, it deserved more say in the decision-making process, something the government had failed to acknowledge throughout the negotiations.

MTUC claimed since the announcement of the EIS, Putrajaya only responded once to the congress’ request for dialogue ― a townhall meeting that was held just eight days before the EIS Bill was tabled.

“Even in the meeting they would not tell us what was the rate of the contribution despite our repeated request for them to inform us,” Solomon said.

MTUC and other unions had proposed that each worker, employers and the government contribute RM1 monthly, collection that could reach up to RM300 million a year from the time the EIS is implemented.

The Malaysian Employers Federation (MEF) echoed MTUC’s criticism of the contribution rate yesterday, questioning the rationale of collecting an estimated RM1.6 billion annually or over five times the compensation for all workers retrenched in the Asian Financial Crisis.

The MTUC and the MEF estimated that only an average of 50,000 workers have been retrenched for the past 10 years and based their RM1 proposal on that estimation.

“The government on the other hand estimated 300,000 workers would be retrenched… are they actually trying to encourage more people to be laid off?” Solomon commented on the matter.

Questions were also raised about the proposed representation in the committee overlooking the funds. Solomon said workers were severely under-represented.

“This can lead to imbalance of decision making authority and abuse of power. Further it can jeopardise the intended purpose and the objectives of the EIS,” he said.

Under the EIS Bill, the government proposed a tripartite committee of 20 members to oversee the fund, which will also be administered by the Social Security Organisation.